Largest Truckers Report Record RevenuePosted On 15th April 2015
According to a recent study published by SJ Consulting Group, the year 2014 saw the 50 largest U.S. trucking companies increase their combined revenue by 10 percent, to $117 billion in combined revenue. This is by far the best performance of these companies since 2011 and edges towards doubling the 5.5 percent growth rate enjoyed in 2013.
In four of the last six quarters, the US economy grew by more than 3.5 percent. This upward trend grew to 4.6 percent and 5 percent in the second and third quarters of 2014. The result is that there was an increased demand for trucking services. Also, the pricing power tilted towards larger carriers.
It is easy to see why the revenue would increase for these trucking companies. In the recent past, not only has demand for trucking services increased, especially LTL freight shipping companies, but the cost of transportation for shippers has risen too.
In fact, transportation managers are working hand in hand with truckers to mitigate these costs and make the burden less heavy for the end customers, and the service delivery more efficient.
The Top 50 Trucking Companies rank trucking companies in order of revenue. An interesting observation to note is that the top 25 out of the 50 largest trucking companies accounted for 85 percent of the total revenue. At the top of the rankings was UPS, with $28.6 billion in revenue while last on the list was Hub Trucking Group with a revenue of $522 million and a growth rate of 8.9 percent. Trucking is considered a highly fragmented industry, with hundreds of thousands of small carriers.
However, the lion’s share of the revenue is controlled by the largest companies, and this is not about to change.
Another interesting thing to note about the companies listed on the Top 50 is that none of them posted revenue of less than $500 million. This set a new floor for the list, giving trucking companies a bottom line that they will strive to beat in the coming years.
Despite the increase in revenue, trucking companies have to deal with the acute truck driver shortage that is challenging the entire freight shipping industry right now. Some of the revenue generated from trucking operations will have to be directed towards hiring more drivers. The trucking companies did engage in hiring last year, but the efforts have done little to reduce the shortage.
More concerted efforts, and detailed strategizing will have to be undertaken to ensure that more drivers are hired, and turnover rates are lowered. Currently, there is a shortage of 35,000 to 40,000 drivers in the trucking industry.
Shortage of drivers negatively impacts service delivery and passes on higher transportation costs to the consumer. Demand for trucking services is expected to increase in the coming months, and it is hoped that truckers are going to ensure enough drivers are hired and retained.